Sir
Mark Moody-Stuart, the former head of Royal Dutch
Shell, must find ways to ensure that business plays
a constructive role at the World Summit for Sustainable
Development in Johannesburg (Rio+10) later this
year. There is nobody in the business community
better qualified for the task. He has the experience,
the determination and, above all, the integrity
to meet the challenge.
But
never before has the integrity of business been so
open to question by so many. The fundamental issue
of business honesty that has been hurled to the fore
by Enron is merely the tip of the iceberg. The drum-beat
of bad news about global corporate behavior worldwide
is formidable. Business is accused, for example, of:
-
Ignoring basic human rights in foreign
operations;
-
Selling illicit African diamonds, which
fuel civil wars and terrorism;
-
Pervasive bribery of foreign government
officials;
-
Destroying foreign forests through illegal
logging;
-
Using sweatshops abroad;
-
Extracting natural resources without any
benefits for local citizens;
-
Using the world's banks to launder money;
and
-
Falsification of accounts to enrich top
executives at the expense of investors
and corporate pensioners.
Business leaders dare not just sit on their
hands. Sir Mark led a top-to-bottom review of
every aspect of Shell's corporate culture, he
put ethics and the upholding of the corporation's
business principles at the center of Shell's
operations, and he determined that Shell should
be as transparent as possible in every aspect
of its work. It was an enormous task. It was
expensive. But Sir Mark believed it was essential.
He was right, and as each day sees the newspapers
reporting yet another scandal and another anti-globalization
challenge, so more CEOs need to follow in Sir
Mark's footsteps. But, concretely, what do they
have to do?
At a minimum, I believe they have to institute
an eight-step global integrity management process.
It starts with the board of directors and, in
sum, these are its key components:
- The
role of the board of directors in building
commitment- ensuring that the board has key
leadership roles and oversight responsibilities
in securing stakeholder trust and management
integrity. The board failed at Enron and,
all too often, it appears remote from key
aspects of management oversight. Today, oversight
does not just apply to the corporate audit,
but also to every aspect of the corporation's
integrity--from its treatment of employees
to its respect for the environment.
- The
CEO's role in global integrity management.
The CEO needs to be seen as the Chief Ethics
Officer. All too often, he delegates the
task. All too often, he leaves these matters
to the human resources department or the
office of his general counsel. That is just
wrong. To ensure effective corporate ethics,
the CEO has to be driving hard--he has to
be seen to be constantly stressing the importance
for all staff to build trust with their fellow
employees, with shareholders, customers,
suppliers, partners, regulators and the wider
community.
- Establishing
core policies for each of the key issue areas.
The top management and the board must focus
on the critical issues, from bribery to human
rights. They must set standards and principles.
- Listening
to the key internal and external audiences.
Every effort must be made by top managers
to know what is happening across the global
corporation. They must encourage employees
to be candid. They must develop systems that
do not penalize serious whistle-blowers and
they must build a listening corporate culture
of honesty.
- Evolving
effective programs that respond to the full
range of internal and external stakeholder
concerns and demands. The programs must be
flexible and dynamic, recognizing that the
global agenda of social responsibility issues
is changing and expanding. The programs must
also be acutely sensitive to the diversity
of cultures and traditions of the many countries
in which the modern multinational enterprise
has a presence.
- Monitoring
compliance--ensuring that the programs are
embraced and practiced across the corporation,
its affiliates and joint-venture partners.
Senior management must find ways to measure
corporate social responsibility policy implementation.
They must make performance in this field
a critical component of the annual performance
reviews of all corporate managers.
- Communicating
internally and with key external audiences
(for example, developing a corporate Integrity
Report). All too often, the top managers
of a corporation are so confident that all
of their managers and staff are acting ethically
that they are complacent. Corporations need
strong teams of corporate communications
executives who understand the complex issues
of globalization and business ethics.
- Providing
leadership--I believe that only corporations
that have put in place the 7 key steps noted
above of a global integrity management process
can confidently talk about ethics in the
public arena. If business is to influence
the agenda, then it must ensure that its
own house is in order first.
Sir Mark sets the standard and his public visibility
is based on his confidence in Shell's performance.
Recognition of Shell's work adds to his authority,
which is key to his effectiveness in the United
Nations and in other forums. Other business leaders
must join Sir Mark by being outspoken, but first
their corporations, like Shell, must be seen
to be acting with integrity, not just posturing.
Frank Vogl is president of Vogl Communications,
Inc. in Washington DC
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